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Summary

Mr Uechtritz (“the taxpayer”) sought a review of the decision of the Chief Commissioner of State Revenue (the Chief Commissioner”), to assess him as liable to pay land tax for the 2011 tax year in respect of his property at Byron Bay, New South Wales. The taxpayer claimed to be entitled to the principal place of residence (PPR) exemption for the 2011 tax year in respect of that property under s. 10(1)(r) of the Land Tax Management Act 1956 (“the Act”). The Chief Commissioner contended that the taxpayer’s PPR for the 2011 and 2012 tax years was another property owned by him, in Rose Bay, New South Wales, but conceded before the ADT hearing commenced that the Byron Bay property became the taxpayer’s PPR for the 2012 tax year.

Judicial Member Walker held that, based on the totality of the evidence, from October 2010 the Byron Bay property was the applicant’s PPR, having regard in particular to the Taxpayer’s expressed intention in 2010 to retire to Byron Bay, the explanations given for the Taxpayer’s extended absences from Byron Bay, the explanations given for his failure to notify relevant authorities of his change of residential address in 2010; and the fact that his wife usually resided at the Byron Bay property when she was not travelling with the Taxpayer for business or recreational trips.

Background

The facts and applicable law were generally not in dispute, nor was it disputed that the Rose Bay property was the PPR of the taxpayer prior to June 2010, or that the Byron Bay property became the taxpayer’s PPR for the 2012 tax year.

Section 10(1)(r) of the Act exempts land that satisfies the PPR exemption criteria specified in schedule 1A. Clause (2) of schedule 1A defines an owner’s PPR either as (a) land continuously used and occupied solely for residential purposes since 1 July in the year preceding the relevant tax year or (b) in any other case, land which the Chief Commissioner is satisfied is used and occupied by the person as the person’s PPR on the taxing date. The taxpayer’s case was presented on the basis that Byron Bay became his PPR in October 2010, which means he relied on clause 2(2)(b) of the Act.

It was therefore necessary for the taxpayer to establish that he used and occupied Byron Bay as his PPR as at midnight on 31 December 2010: Aldridge v Chief Commissioner of State Revenue [2003] NSWADTAP 560 at [12]. Further, if a person uses and occupies more than one place of residence, the Act provides that only one of those places can constitute the person’s “principal” place of residence: Black v Chief Commissioner of State Revenue [2011] NSWADT 66 at [81].

Chief Commissioner’s submissions

The Chief Commissioner considered that the Taxpayer’s PPR was the Rose Bay property because:

the evidence demonstrated that the taxpayer spent more time in Rose Bay than in Byron Bay during the period from 1 July 2010 to 30 June 2011;

the Taxpayer had not advised the RTA, ASIC and the Electoral Commission, that his residence had changed from Rose Bay to Byron Bay until May, June and December 2011 respectively; and

the Taxpayer’s children resided in the Rose Bay property.

Taxpayer’s submissions

The taxpayer travelled extensively within Australia and internationally for business, charitable, family and recreation purposes, and maintained residences in Melbourne as well as his Sydney and Byron Bay residences. He also maintained other assets, including cars, furniture and clothing in Melbourne, Rose Bay and Byron Bay.

The Taxpayer maintained that it was his intention upon his retirement in May 2010 to move to Byron Bay. He became a member of a golf club in Byron Bay, and an active member and office bearer of the Byron Bay Rotary Club.

The taxpayer directed his accountant in October 2010 to advise the Office of State Revenue that the Byron Bay property had become his PPR, and asked what formal steps he needed to take. However he did not receive that advice until 2011.

He did not change his address with the RTA in 2010 because the Byron Bay property did not have a letterbox, and the RTA would not accept a postal address for the purposes of his driver licence. He did not change his mail address from Rose Bay to Byron Bay until he received advice from his accountant in 2011 because most of his mail was business related, and was managed by his personal assistant (his sister) who lived in Sydney and who also took care of his daughter and acted as caretaker of the Rose Bay property.

Decision

Judicial Member Walker considered the following factors, drawn from the decision of the Appeal Panel in Chief Commissioner of State Revenue v McIlroy [2009] NSWADTAP 21 [Para 45], were particularly relevant in this case:

the intention of the person concerned, gauged objectively, is relevant even though not determinative;

the person’s occupation must have a degree of permanence to it; a transient, temporary, contingent or passing connection is insufficient, as is occupation for some other purpose;

the short length of a person’s residence, while relevant, is not determinative if the reasons for departures from the residence are reasonable and adequately explained.

Judicial Member Walker held that, based on the totality of the evidence, from October 2010 the Byron Bay property was the applicant’s PPR, having regard in particular to:

the Taxpayer’s expressed intention in 2010 to retire to Byron Bay,

the explanations for the Taxpayer’s extended absences from Byron Bay and extended periods of occupation of the Rose Bay residence, especially between 1 July 2010 and 30 June 2011,

the rational explanations given by the Taxpayer for failing to notify relevant authorities of his change of residential address in 2010;

the fact that the Taxpayer’s wife resided at the Byron Bay property when she was not travelling with the Taxpayer for business or recreational trips.

Judicial Member Walker set aside the decision of the Chief Commissioner that the Byron Bay property was not the Taxpayer’s exempt PPR for the 2011 tax year.